THE JOBBING SYSTEM OF THE LONDON STOCK EXCHANGE: AN ORAL HISTORY

Interview No. 3: Gerald Lederman

Interviewer: Bernard Attard

18 December 1989

Tape 1, Side 1

BA: Well the first thing that you could tell me was the date where and when you were born.

GL: Born in London, 1932.

BA: And who were your parents?

GL: Father's name was David Lederman, and mother's name was Sylvia Doris Lederman.

BA: What did you father do for a living?

GL: He was on the Stock Exchange, with a firm called Carr Weir who were known as shunters. They arbitraged between country Houses - country Stock Exchanges - and London, but I didn't know very much about it, obviously.

BA: Yes. And your mother simply... She stayed at home in the house?

GL: Yes. I think my father was known to be a fairly hefty gambler; and like all these things when he was up he was up, and when he was down he was down and had two or three of those situations.  He gambled a fair bit on the Stock Exchange, I think.  And that's basically how I got to the Stock Exchange.  I can recollect my younger brother joined the Stock Exchange - and this is the time, of course, of National Service.  My older brother was doing National Service; did his, came out and went to the Stock Exchange after a while. I did my National Service, came out and went to the firm that both my other brothers had been to, which was Smith Brothers then. Which was 1953 when I joined Smith Brothers.

BA: Did your younger brother stay with Smith Brothers?

GL: No.  He did his National Service and then when he'd finished his National Service there wasn't room for him back in the firm.  I had been, prior to that, with a couple of other firms but that was purely as a messenger boy.  One [job] was with a very small firm of gilt-edged jobbers: literally one went round to the Bank of England, collected transfers and had to deliver them round the City by a certain time because of all the payments and what have you.  So at least I found my way round the City fairly quickly.  But then, as I say, I came out of National Service and went straight to Smith Brothers in March '53.

BA: Let's go back a bit.  Where did you go to school?

GL: Whittingham College, which was a private school, which was based in Brighton but when I went it was during the war and the school was evacuated to South Wales.  So I spent 90 per cent of my time in South Wales.  

BA: And after school?

GL: After school, virtually I did these couple of jobs in the City, when I must have been 16 or 17, and then into the army for two years National Service.

BA: How did you get these first jobs?  Were they through contacts?

GL: Must have been somewhere along the line. I think it must have been my mother phoning somebody up in the City.  But as I say they were absolutely runner-boy jobs and then tea-boy jobs.

BA: Were they jobbing firms?

GL: One was a jobbing firm - the first one was a jobbing firm which in actual fact closed down - and then the second one was an extremely small firm of brokers who literally had private clients - they didn't have any institutional business at all, or as it was then, this was just private client stuff.

BA: Do you have any particular memories of those firms?

GL: Only minor incidental things.  The second firm - they didn't even use carbon paper to copy letters, they had a press and, you know, you had to screw this press round to get another copy and if it was over-watered slightly you ruined the letter.  Which I certainly did on a number of occasions.

BA: This was the broking firm?

GL: This was the broking firm, yes.  But I don't think I was of an age then when I was in any position to really know what was going on as far as the Stock Exchange was concerned at all.

BA: And then you went straight on to National Service.

GL: National Service.  And came out in March '53 and I think within a week of coming out I started at Smith Brothers.

BA: Your contact there was your brother, was it?

GL: Yes, yes. I think my mother had got one of the brothers in and then the sequence followed and I joined there.

BA: What attracted you to the Stock Exchange?

GL: I think, probably, the family had been there before and I suppose quite truthfully, I wasn't qualified to go into the professions or anything like that.  And it seemed to have provided a passable life for us as a family, and I must admit I did enjoy it. 

BA: Had your father retired by then?

GL: He died.  He died during the war.  Not actively, he had a stroke or some such thing and died in 1943-44, I think, something like that. It was while I was at school.

BA: What was the first job you had when you arrived in Smiths?

GL: A clerk in the office, doing things such as jobbers' ledgers, writing up the bargains in the afternoon - the dealers used to come back from the Stock Exchange, take out the profit and loss and then you would get their jobbing books and you had to write out all the bargains so that they could be checked the next day with the broking houses that the firm had dealt with.  Then, after a while, it got slightly more sophisticated - you were looked at as a potential to go into the actual Stock Exchange - in other words the ladder was showing that you were going to be a dealer at some stage and the first stage along that was going from the office to becoming a blue button - or you became a red button, in actual fact, which was a checking clerk. You had to go and check the bargains from the previous day early in the morning with all the other things. If you did reasonably well at that you became a blue button which was when you were definitely marked down.  That's when you actually first went into the Stock Exchange itself.

BA: Was it all promotion by merit?

GL: Strictly speaking, yes.  But I suspect that there might have been a helpful hand from friends of the family or something like that. But the firm didn't suffer fools gladly so if you were no good, I mean, they would tell you so on the basis that it was better for you to know early on because it would be unfair for both sides, really.  Because we certainly asked some of the partners' sons later on to leave - I can think of one who just..., he wasn't a jobber. And it could be costly. And again it was possible that if you didn't make it as a jobber you might well turn out to be a good stockbroker: the mentality is totally different of the two. So, again, you could help people by asking them to switch sides.  It was interesting the dress then: you had to wear a stiff white collar and dark suit and black shoes; and discipline was quite strong although the hours, of course, were totally different to the hours now and to my mind one of the beauties, again with hindsight, was [that] this was a small firm who one could see was starting to grow.  

BA: In what ways could you see that?

GL: The attitude of the partners - they were basically all self-made people - I don't think any of them had qualifications of any sort. Three or four of them had been in the war together, I think, and they were ambitious, wanted to succeed and I suppose if you had successful people it was easy to double from one to two and two to four and four to eight - a bit tricky when you're going from 156 or 256 or whatever to 500, and there was this attitude in the firm, I think, and it was exciting.

BA: Can you say something about the partners as individuals, you know, fairly early on in your career with them?

GL: Well the senior partner, of course, one didn't know desperately well, being a youngster.  The man I worked under basically, was a man named Sidney Davis.  I started off in the South African mining market and to my mind he was an extremely shrewd, honest man. You had to tune into the thinking of your boss, or try to, and he was absolutely clear-cut with his thoughts on which way the market was going to go.  He was extremely friendly with another one of the senior partners - a man named Henry Marks who was totally opposite in his approach, I think, to the business in that he was a flair man.  Logic didn't come into it at all.  He was an absolute flair man.  He would walk in one day, 'This market's going to do so and so, and so and so - it can move one way or the other,' and his flair was right seven times out of ten, or eight times out of ten. But two totally opposing attitudes and, I think, from my personal opinion, that was marvellous for me because I caught both sides of it and they were my tutors as such.  The senior partner at the time was man named Wilfred Rantzen who was an extremely clever man, extremely astute, respected by the whole of the Stock Exchange but I didn't come under his wing at all but he was the head piece of the firm as such.  And the other senior man around about that time was a chap named Sidney King, who I should think probably my brother's told you more about because he worked with him directly, so again I didn't have a lot to do with him.

BA: Did you build up a fairly close working relationship with the jobbers with whom you were directly working?

GL: With the other jobbers?

BA: Well with the ones, the particular partners, whose markets...

GL: You mean in one's own firm?

BA: Yes, Sidney Davis and....

GL: Yes.  There was an age gap obviously, I don't know, I suppose in my case fifteen to twenty years with someone like Sidney Davis.  But I think you've got to build up a relationship if you're working day-to-day. He would certainly turn round and kick me up my arse fairly strongly if I was doing things wrongly but basically I certainly appreciated him and I think he appreciated me otherwise, as I said before, he would have turned round and said, 'You're no bloody good', or something like that, and move me to another pitch, which happened at times if people were incompatible. It happens in all walks of life - [there may be] a respect for each other, but if two people really don't gel then they can be moved to another market or such.  No, I had a very good relationship with both Sidney Davis and Henry Marks.  Henry Marks, I think, was a more friendly man, outwardly, in that he would certainly [invite you to dinner]; I suppose, three times a year something like that, one would go round to dinner at his place.  Well, again, he lived in town which helped a lot.  Sidney Davis lived in Hove and was slightly more remote, I think a shy man underneath it all.  But I enjoyed the relationship with them both.

BA: Where were you living at this time?

GL: In London, getting the tube into work.  I think, if I remember rightly, we had to be in the market by 9.30 and I seem to remember coming out of Bank Station about 9.25 sprinting up to the office to collect the jobbing books and sprinting down to the market and, I suppose like all youngsters, getting there with about two seconds to spare or something like that.

BA: Did you ever pick up any stories from the partners about the firm, before you'd actually joined it, or...?

GL: Not a lot, I didn't.  One of the partners then who was on the way out was a man named Morris Smith who was the connection with my mother, and I think in broad terms she said, 'You know you're joining a good firm' and that sort of thing, but no, I think you found out for yourself what the firm was like.  It was basically a Jewish firm - there was a certain amount of anti-semitism around then but I think if you played the game and played it by the Stock Exchange rules there was no problems at all.

BA: When you say Jewish firm, do you mean that the brokers who were coming up to deal with you were from Jewish firms or just the personnel in the office itself were?

GL: No. The majority of the partners were Jewish so it was recognised as a Jewish firm as such and it might have been that certain brokers in those days, would not deal with you because it was a Jewish firm - and vice-versa, it might have been some dealt with you because you were a Jewish firm, you know.  But there was in those days a, I would say, ten per cent of people [who] might have cast a doubt over the firms financial position or what have you.

BA: About how much time was it between starting with the firm and being sent to the Stock Exchange as a checking clerk?

GL: In my case, I was probably lucky, or quicker than most.  I started in March '53 and I think towards the end of '54 I went down [in] the market and that's probably because [of] my brother - we were both made members at the same time and it might well have been had he not been there I might have had to wait for it. So I think I was pushed through slightly quicker because there was a training period, or should have been a training period.  You had to do a certain time as a blue button which I think was two years, if my memory serves me correctly.  And as I say I was pushed through rather quickly. 

BA: Now could you talk a little bit about the firm at the time you became a blue button?  What markets was the firm dealing in?

GL: As I say, I was in the South African gold-mining market, which had been its original strength.  It dealt in the equity market, in stores shares and general equity shares - your ICIs and Courtaulds - dealt in oil shares in a very pathetic way, this is where the old partner dealt but I think he was just a one man fellow there.  And that was basically, if I remember rightly really all it dealt in and as I say, the firm started to grow and then expanded rapidly over the years.

BA: How did it compare in terms of size with other jobbing firms at this time?

GL: Well, at that time you had a hell of a lot of jobbing firms, from one-man firms to fairly sizeable firms; it was in the small to medium range.  I mean, there were a lot of firms who were a lot bigger, and as I say there were also one-man firms. Capital wise it was very small - I can't remember the figures - but in relation to today there was a sort of, if not a permanent capital crisis, you were looking over your shoulder that you weren't over-trading, which I think had been apparent in the place for years and years anyhow.  But it was a partnership of four to six people, what have you; it was in the lowish range but on a progressive move [up], I think.

BA: Do you have any particular impressions or memories of the House at about this time when you started?  Did you find it a bit intimidating going into the Stock Exchange as a blue button fairly early on?

GL: Yes, very much so.  It was a new world, and I [... remember] the first day I stood myself next to my partner. On each area there were Stock Exchange waiters who stood on a high dais thing and they had tubes where they could blow down and hear people and if someone outside the Stock Exchange was calling my partner or something this waiter would stand up and call the blue button to say you were wanted outside the Stock Exchange. And I couldn't understand a word this chap said to start with: they always used to put their hand below their mouth to make their voice carry and of course if you've got several hundred people in the place you've got to hear; and to my mind this was a chap who looked like Winston Churchill - I can see the chap now with his top hat on - and he stood and went 'bop!' and I stared at him. And he did this 'bop!', oh eight, nine, ten times, so I stared at him and then he started calling me and said, 'I'm calling you,' and I said, 'What d'you mean "I'm calling you?"'.  And after, oh, a month or two I realised that 'bop!' came out as 'Smith'.  But for a month or so you stood there shaking; you were watching the waiter in case you were going to be called, also trying to follow what your partner was doing. As against which there were some extremely friendly people in the place who realised here was a youngster starting out. A lot of them were very, very helpful, not necessarily in business ways, but would just come up and say 'Good morning' to you and were extremely friendly.  There were the few nasties as well - you've always got your mixture of people but it was frightening but then gradually as one got involved with it then it became an extremely nice place.

BA: Well, you've already mentioned the dress standards, was it very formal in other senses? I mean were there all sorts of unwritten rules of behaviour, and how you'd speak to people, and so on?

GL: Yes. There were. I'm trying to recollect.  You were never allowed to ask [a broker's name];if a broker came up onto your pitch to deal and you weren't quite sure which firm he was with, you were not allowed to ask him.  And the theory was that, as he left the pitch and went walking round the the Stock Exchange, the blue button (such as myself) had to follow him round and when he went to speak to a chap a few yards away he went up to that fellow and said, 'Excuse me, Sir, could you tell me who that gentleman was with?' And he would.  I managed to get hold of a chap once who came on the pitch, dealt with us, and we weren't sure who he was with so I had to go and follow him and he went round the Stock Exchange, just staring at boards, didn't speak to a soul, then walked out of the place and started to walk down to Bank tube station, by which time I thought well I'd better abandon this one. Yes, it seems ridiculous in this day and age that you couldn't ask, but there was that sort of code. As against which there was the playful time when the men let off steam and there were always the throwing of paper balls and that sort of thing, particularly at guys that were wearing top hats - you know, throw a paper ball in his top hat; and another joke was putting torn up newspaper - little bits of newspaper - in a chap's umbrella, put it down his umbrella and then as he started to walk out, up went the umbrella so of course the shower of paper came down  - sounds childish, all these little gestures.  You weren't allowed to run, really.  If you had to do something very quickly you had to walk very fast.  If you knocked into an old member, he'd haul you back, and certainly if you landed on the chap's shoes.

BA: Did a lot of these practises continue for a long time, or were they gradually disappearing, for example people running around wearing top hats?

GL: Yes, it changed with the ages, I mean from top hats it went to bowler hats and then to no hats, really.  The dress got relaxed.  I can't remember how long stiff collars were in but then I suppose someone came in in a soft shirt or a soft white shirt and then years later someone came in with a soft coloured shirt or what have you.  Yes, it all changed but I think the place, the attitude was, 'Well, let's be seen to be at least twenty years behind the times', that type of thing.

BA: So did members of the House, actually enjoy having some of their eccentric practises?  Kind of made them a little bit distinct from ...?

GL: Yes.  I think it was the way of letting off steam.  I mean, I'm sure everyone was under pressure then because it was a competitive world, perhaps not as competitive as it is now but in that day and age it was and that was the way of letting off steam - or, no doubt, nipping across the road to the pubs and the bars and what have you. And it did create an atmosphere in the place and I would have to say that I think the Stock Exchange in those days had more recognition than it does now.  I certainly remember many, many years ago going into a shop in Burlington Arcade, at Christmas time, to get a present and I bumped into a chap from the Stock Exchange.  Whatever I was buying, [I said to] the chap behind the counter - I'd got my chequebook out or something - and said, 'Is that alright?' And the other chap said, 'He is a member of the Stock Exchange', and there was no [quibble], 'Oh, a member of the Stock Exchange, oh, perfectly alright'. You know, I suspect one couldn't do that now.

BA: Could you describe a typical day, more or less when you started as a blue button, you know, from actually leaving the house to get to the office and then going onto the Floor and assisting the partner during trading right through to the end?

GL: I'll try.  As I said before it was going by tube to work, getting out at the Bank station, running up to the office and you had to get the jobbing books of the area that one was working in - I was working in South African mines which was split in two halves and where I was working there were three or four jobbing books - take them down to the market and then the market opened at 9.30.....

BA: How big were these books, actually, physically?

GL: The books were probably, the size of that lengthways...

BA: A4 size.

GL: Yes, and almost half in size. In other words you just wanted two or three columns to write the number of shares you were dealing in, the name of the broker you had dealt with and the price of the share.  And you had another column to keep a constant running position of what your position was in those shares.  And that was one of the jobs that the blue button had to do because if your senior dealer was dealing and you would listen in and book the bargains at times and he would turn round and say, 'What's my position in Lorraine Gold', 'You're a bull of 8,462', or what have you so you had to be quite good or quite quick with figures because if it was busy - and at times it was busy - not only were you dealing in Lorraine Gold, he was dealing in eight, nine, ten stocks and booking bargains and then of course as I was saying before he had to know, in broad terms, what his capital position was. If he was a bull of all his stocks quite clearly his financial situation, or his capital situation might be tight and from the risk angle as well because he would want to keep a balanced book. So basically you were in there at 9.30 and then the dealings would start. And you also with some of your best brokers, some of the professional brokers, experts in South African shares, you had to do a list for them, keep them up to date with their prices because in those days they were speaking to South Africa and there was a two hour gap but with the arbitrage you could actually buy stock in South Africa, come in and sell it in London and there would be a turn in it or vice-versa. So these chaps had to have the absolute up-to-date prices all the time and that was one of the jobs.  After a while you were told to go and do so and so's list, so you have to know your prices of twenty, thirty stocks. And then, of course, your boss might suddenly shout for you because another thing you had to do was to run 'limits'. Which was when brokers would ask you the price of a share and if a client had said I'm a seller of these shares at £1.20, for example, in modern money, and the price of the shares was only £1 at the time you would have a limit page and you would put a note in 'seller at £1.20' and the name of the broker. And if the shares suddenly moved or the market opened up higher, your boss would turn, 'Quick go and bid that broker for that stock'; and you were competing because he would have left that limit with four or five other jobbers and these brokers' boxes or individuals could be anywhere round the Stock Exchange, so you had to learn also where all the brokers' boxes were.

BA: So it must have been sink or swim fairly early on?

GL: It was. It's amusing in its way because you went tearing off at times and, of course, you then had to find the individual in that firm and he might be having a coffee across the road or anything, but it worked, it worked in its way.

BA: Would you ever have to pursue them outside of the House? Or would you wait for them to come back?

GL: No. you would leave a message with somebody in that firm, trying to state very clearly 'its Mr Snooks' business' and, of course, you got known yourself after a while by the brokers, particularly the professionals because you were involved with the professionals all the time.  And a partner might take a message for you or the individual concerned might have left a note with all his partners: 'Look  I've got business on in xy and z shares, if anything happens, please deal for me.'  

BA: And this would be going on throughout the day?

GL: Yes, yes.  In broad terms I would say you were trying to keep your partner in touch with his positions, or the firm's positions, you were doing your limits. And in those days we had boards on the wall, with all the stocks up; and your job was to alter the price of those, using blue if they were going up and red if they were going down.  And it all took time because as you were doing that so you were keeping an ear open for what your partner was doing if he was dealing, because you wanted to know what was going on, because quite clearly if he was doing a big deal there was going to be a change in price or what have you.  One of these professionals would come up and say to you, 'What's the price of Welcome Gold', and you know, you'd suddenly shoot out a slightly old price and your partner might have heard and told you, 'No, they're not that at all, the price has changed', that sort of stuff, so it was exciting.

BA: Was there a lot of background noise?

GL: Yes. Particularly if the markets were busy because in those days, certainly in the mining market, there was a lot of open bidding, you know the jobbers would shout out what they were trying to do. They would bid for stock and if a price was changing, he would make the change by: if the comparison now was, the share was œ1, the best bid was œ1, and he decided no he was going to bid more, he would suddenly shout out '102 buy' whatever the stock was and vice-versa if he was selling. So certainly at times you could get a hell of a  lot of noise. But it created the atmosphere of the place. Because if there was no shouting then it was a quiet day and there wasn't much business going on and then the days could be very long if there was nothing happening.  

BA: Presumably then you were competing directly with other jobbers, who could hear...

GL: Oh, yes.

BA: ... could hear what you were calling and they would be altering their prices if they...

GL: They could hear what you were calling if you were bidding openly, yes; you didn't bid openly all the time of course, at times you were doing your secret deals.  You bid openly to perhaps stimulate a market, perhaps to con other jobbers; you might have bought a lump of stock at œ1 and you were actually trying to sell it and you thought, 'The best way is I'll try [to] call these up and everyone will think this is a better market suddenly,' so you went in and bid 102. Now one or two of the jobbers might think, 'I think he's conning me here', and they might sell you stock in which case your bluff might well have been called.  It was part of the game. 

BA: So when you say call a price, you wouldn't indicate whether it was an offer or a bid price? Would say I bid?

GL: Yes.  If you were doing it out loud, yes, you had to bid or offer - or you could make a two-way price - bid and offer price out loud if you wanted to.  No, it was quite clear what you were doing. It was in fractions in those times, '9/16ths buy Free State Geduld' or '5/8ths buy Free State Geduld'. It was exciting, particularly at times where there might have been a - there were very few in the South African market - take over type situation going on.  Certainly one of our competitors had some business at one stage, I do remember, and round about lunch time he went into the market and started bidding for this stock and - I think the things were standing at 11s. then - '11s. buy Dominion Reef' and everyone looked around and then two seconds later, '11s. 3d.' buy Dominion Reef and then '11s. 6d. buy Dominion Reef', '11s. 9d. buy Dominion Reef', '12s. buy Dominion Reef', you know, so you weren't quite sure what was going on it transpired afterwards.....

Tape 1, Side 2

BA: A jobber had to be quick on his feet when a competing jobber was bidding up the price?

GL: Very much so, very much so. Well you had to be quick on your feet all the time, it was a competitive business and at the time I suppose one was competing with fifteen to twenty other jobbers and of course the best way of competing was by making the most commercial prices to brokers, and then obviously if you were more commercial then your margins would be trimmed somewhat by being more commercial, but this was it, you had to gain the confidence of brokers and what you wanted was the broker to be coming to you first.  As I say, when I started at the South African mining market, there were two very big Houses of jobbers there and most of the big brokers would automatically go to them.

BA: Can you remember the names of those?

GL: Yes. One was called Lemon Brothers and the other was called Lazarus, both big houses, George Lazarus ran Lazarus and they had a very good reputation. So you had to work away at these brokers, sending out bids and offers to them so that [at] some stage one of them might [say] 'My God, that firm is very commercial, I must give them a shot' and obviously the Lemon and the Lazaruses were trying to hold onto that business and so you broke into it that way and the more you gained, so the more they lost and the more - you couldn't dominate a market, of course - the more you would see the bigger size ordered first and then you would get an inkling of what was happening.

BA: Did any of these jobbing houses actually have connections with the mining houses in South Africa, or had they simply decided that that was the market they wanted to develop?  

GL: 'Connection' is perhaps not the word; they might well have had individual relationships, they would have known people, they might have known people in the House.  No, the people that had the connections basically were the brokers - then, of course, the idea was to get friendly with the brokers who had that connection and you might have got a nod or a wink at times - the broker had to do his business so he had to be very careful, very careful. You had in those days, press tips. Sunday papers used to tip.  I certainly remember once where one of the mining shares called Lorraine Gold was tipped by the Sunday papers and the next day we did over twenty pages of business. There were about 30 bargains, I think on a page, and all but six of those bargains were stocks sold to the public. In other words the broker came up and said, 'Buy 500 shares'; and the six bargains the other way was the actual shop broker selling a stock, in other words he would sell 100,000 Lorraine and we would just peddle them out to Joe Public and then he'd sell us another 100,000 perhaps at a price slightly higher. That sort of thing.  This is where the broker connection came in.

BA: Could you explain a little bit about what the shop broker was?

GL: Yes.  He looked after the affairs of the company in the Stock Exchange. Basically, I suppose, certainly in the equity market, if a company was going to have a rights issue or raise money or what have you, it would be his job to do that sort of thing.  He liked to know what was going on in the shares, whether there were big buyers around, or big sellers around and generally keep an eye on it and in this case the shop wanted to sell, or the company wanted to sell some of its own stock and it so happened by sheer good fortune they were tipped in the paper so the stock went to Joe Public.

BA: Well let's go back to this typical day.  Would you stop for lunch at [some] point? This was when you were a blue button.

GL: Yes, unless one was busy.  If it was extremely hectic, certainly the dealers, the senior men, wouldn't, they would go through the day. In fact I remember this happening to me once and my boss insisting I go out. You know I was saying, 'No, I'm not going out, I'm not going out'. A) the adrenalin's flowing and you're scared stiff you'll miss something. [He said]: 'No, you'll go across the road even if you just get a sandwich.' So you went across the road, shoved a sandwich in your mouth and shot back, you know, in five minutes. I suppose, like all free markets it was wonderful when that was happening but I certainly had a spell in that market where at one stage we were doing six bargains a day, but you had to be there and that was hell, absolute boredom. So that's when you started throwing your paper balls and doing your crosswords or what have you. But contra-wise when it was going well the excitment and dashing up to the office and doing the books afterwards; and you could be there... we were there until midnight at times doing all the paperwork or stuff, but you know, you were definitely [feeling] 'I'm King of the Stock Exchange now'. It was marvellous, marvellous.

BA: What did you do at the end of the day when the house closed?

GL: Went back to the office and helped with the books - as a blue button, as I say, you had to write up the bargains, put them on sheets of paper to get them ready for checking next day, which if you'd been busy, took a long time. When you became a junior dealer, then you had your own P and L to do - Profit and Loss - so you took out your own Profit and Loss and told your boss man that you'd made œ1 11s 3d that day  or some such thing, or lost #500 or whatever it was.  And then you helped; as a blue button, in theory you helped with the general office. If you happened to know your manager reasonably well, you managed to say 'Well, I'm very tired sir I've been down the market all day today,' and you might slide off for a beer around the corner or something like that.

BA: Would you often be quite worn out after a busy day if you'd been running around?

GL: Yes, but you were of the age then that you were worn out and then revived yourself in a couple of hours and go round the town if needs be.  Yes, it was physically tiring, as I say, because if you had 50 or 100 of these limits to do you were running round the Stock Exchange a lot, and mentally tiring, but also stimulating in its way.  But if it went on for too long, I think everyone got slightly jaded. It was the late nights at times that knocked everyone, and I think the dealers, the senior partners, having your wits around you constantly was alright for a week, a month, two months, three months, but then tempers would get slightly frayed, a little bit.  

BA: What was the actual office like physically, you'd go back at the end of the day - would you have your own desk, were you all in one big room together.

GL: Certainly weren't all in one big room together, but no there were a lot of small rooms. I don't think in the whole of my career on the Stock Exchange, jobbers' offices were ever luxurious in any sort of way.  No, you didn't have your own desk in that you weren't there for most of the day. From 9.30 to 3.30 you were on the floor and no-one wanted to pay out whatever the rents were then unnecessarily so you came back and there was, I think some of the office moved their things at 3.30; and I think again you had 8, 10, 12 possibly blue buttons from varying markets and we were probably a fairly noisy crowd and probably slightly big-headed because we were superior - we were the market people - and this was the office, and I think we got up to a few high jinks so they shot us off into a room, at 3.30, of our own.

BA: Was there much social life for you at this time,  connected with the House either with other blue buttons, other people your age, or within the office?

GL: Yes, there must have been, probably your own firm to an extent.  Yes, we certainly went to football matches together, might well have gone up the West End a few times, [and had] lunches together. Yes, yes I think its a lovely age when you're in [your] twenties and thirties when you haven't got great responsibilities and probably 90 per cent are unmarried and as I say we were the King of the City sort of thing - and there was a bit of drinking as well.  I think it was work hard, play hard which I think is a bloody good philosophy.  

BA: What did you think about the broking side of the Stock Exchange, did you have anything to do with them outside of the House?

GL: Well you got friendly with brokers, or acquired friendships, or made friendships because they were the customer. So yes, you would go out drinking with some of those because if I was friendly with Snooks then Snooks was going to come and see me hopefully the next morning if he'd got any business, but as I say when you were starting, the brokers with the big business were of a different generation, they would be friendly with my senior people.  But it built, gradually, and as I say there were some very nice people there. It was later on really when one was running one's own pitch or something that you got friendly; yes you went out with brokers quite a lot.  But a group of no more than ten to twelve, in other words picking up the big Houses, the ones that had the business quite truthfully and they were the ones, if you were seeing their business you were in constant touch with and the rest were more and more on the fringe, you know there was the next layer, then the next layer, so I suppose one might truthfully say you were making friendships out of business, but some of those have certainly remained, as far as I'm concerned.  

BA: Well this actually brings me to one question I was hoping to ask you about, and that is: were there different league tables of jobbing firms and broking firms that did different types of business, different sizes of deals, and basically the broker went and found the type of jobber who was doing the sort of business that he wanted to do?

GL: We're still talking about the old days are we?

BA: Yes, let's talk about the '50s, more or less.

GL: '50s.  Yes, well I think it evolves through life. As far as I was concerned, being in the mining market there were brokers that specialised in mining shares, for example, they might not have heard of ICI, that's exageration, of course they had, but they would have their senior men in the mining area.  The big houses: you could split it into two types really - there were those who were well connected with the South African houses, in other words the shopbrokers, and there were the professional arbitrageurs - those that were arbitraging between South Africa and London.  Then you had your good London broker who got business in South African shares but not on any sort of regular basis and then you got the really - what one called the tame broker - the chap who was dealing for the private client who would come in and buy the 1,000 Lorraine or his 1,000 Free State Geduld or what have you.  So there was a league table really, yes. 

BA: Did the same apply to the jobbing firms?

GL: Yes, in that I think, as I said before, you had your sizeable jobbing firms - again talking about the mining market - which was Lemon and Lazarus, then you had three or four other firms starting to challenge them, then you had your one-man firms and quite clearly a broker who'd got shop business was not going to go to a one-man firm because he couldn't afford that one-man firm to go up the spout, quite truthfully. So even if on a rare occasion that man might have been making a more commercial price, he had to by-pass him and go and deal with one of the houses where he knew the settlement would be alright. And the back office [also]. The stuff would go through by back office; I mean the processing or what have you, which has always been a problem in the Stock Exchange [in] that you always got the boom and the back office could never keep up. Because basically firms laid off people when it was quiet, the boom starts then you had to acquire the people afterwards by which time it was always too late. So your back office got stuck in the gum tree.

BA: Did you get this in the mining market a lot - I mean, periodic booms and then low periods?

GL: Yes.  I certainly can remember a huge boom there. I mean presumably, well obviously the political situation was dramatically different to what it is now but the beauty of the mining shares [was] the shares could move like wildfire, so if someone wanted a punt, he could blow his nose and have a profit very quickly.  Again, reminiscing, I remember a story - one of the shares we dealt in was a thing called New Union Gold Fields - Nuggets as it was known as.  And on Friday night or what have you I went home, I can't remember the price, let's say these things were 50 shillings, and I came in on Monday morning and my boss said 'Call New Union Gold 70 shillings'.  I said '70 shilling! Why?' He said because they were changing hands at Sandown racecourse on Saturday at 65 shillings - there was a tip out for them.  It was much freer then.

BA: We can come to the point where you actually became an authorised clerk and started to act as a dealer.  How did this come about.  Was it again promotion by merit?

GL: Yes. It would be [that] the partners would review and might turn round and say, 'Yes I think you will make a dealer. ' It might be that they could have been desperately short - one or two people had left or some such thing and they were trying to plug the gaps.  I'd like to think in my case it was merit.  They would assess you when you had been this blue button fellow and, as I say, had they thought you were useless after two or three months, you might have got a kick up the arse and [been] told to pull your finger out and the partner would have said, 'Look, you're not showing any promise', or what have you; or it might be that he was keeping an eye on you and thought you were useful, and they would gradually put more responsibility on you. And you were not allowed to deal as a blue button, but had you been down the market for a year and certain brokers got to know you and one of them came up on the pitch and would say to the partner, 'What's the price of so and so?', he might turn round and say, 'Come on, make him a price.' And so gradually, if I'd made the right price,  you know, the broker would look at the partner and he'd nod and say 'yes'.  So the partner could then assess you as to whether you were clued up as to what was going on; so that one became a dealer - and a frightening thing it was.  Like all these things it's marvellous when, especially with the blue button, you could always throw the responsibility back.  But here you were standing on your own.  Once you were made a [dealer] you were given your own book - your own jobbing book - in other words you were given your own stocks which might have been five or six stocks only, and probably the lower priced ones, because the heavier ones, quite clearly, the partner was going to handle.  But it was still an experience.  Here you were suddenly running your own book and [...] usually you were given a file of stocks and you were given one good stock because they had to assess you and [they would] give you five or six of the rubbish which was not [good stock] and you could get some business in this one stock where you might be dealing with the senior partner of a firm who was the shop broker, and your own boss would keep an eye on you for a while but gradually the responsibility moved.  Then he might go out, go and have his pee and go across the road or go and have a chat to his friends, so you'd be running the whole pitch for a while. 

BA: So for most of the day your weren't actually completely by yourself, you were all on the same pitch.

GL: Yes.  There were I would say at least two dealers and a blue button, possibly three dealers and a blue button, in your own little spot.  And if the senior man went off then the two i.c. would be there.  During lunch, for example, they certainly wouldn't both go out and leave you on your own - not for some considerable time.

BA: And about how long were you a dealer before you were invited to become a partner.

GL: I don't remember to be honest.

BA: Was it short time, a long time?

GL: I'm trying to remember when I became a partner. No it wasn't a long time in actual fact. I can't give you dates I don't remember. But of course one became an extremely junior partner.

BA: Well let's just set that aside for one moment.  Did you have any disasters during this particular period when you were just starting off as a dealer or any particular successes, or nothing stands out?

GL: There must have been disasters.  I think you got the sort of thing - Yes I can remember dealing with an individual who is still on the Stock Exchange and was senior partner in his firm until Big Bang, but he isn't now.  In mining shares there was a mining share called 'Freddies'.  I can't remember it was Free something or other. I can't remember.  There was a Freddies North and a Freddies South and there was a gap in the price always of a penny or a penny farthing which was big money in those days. And this chap was dealing [with] me like wild fire for two or three days - no not two or three days, all day long - in what I thought was Freddies North.  And the next day up came the checking query - he'd got everything booked in Freddies South. Yes.  So that if I thought I'd made œ1000, of course these things always go the wrong way. 'Oh no,' he said, 'I dealt in Freddies South.'  Well, normally, 99 times out of 100 the jobber took the can if there was a mistake - and a lot of them were legitimate at times.  I thought I had genuinely dealt in Freddies North, he thought he had genuinely dealt in Freddies South and my partner turned round and said 'Well, we'll have to alter it to Freddies South.  So here's me having my wonderful day and suddenly the money I'd made had blown up.  I remember another story.  There was another share called Writs - West Rand Investment Trust. And a chap came up and dealt with us, [he] came along the next day [and said]: 'Terribly sorry, I should have dealt in Ritz Hotels.'

BA: How did you get out of that one?

GL: Again, quite clearly, a genuine mistake.  You had to cancel the bargain.  I think one of my biggest - not disasters - one of my memories that will stick with me forever is this open bidding.  These chaps that used to bid had deep confident voices and I was told after a while (by this time I was working for Henry Marks), 'Go in and bid openly.'  It was quite frightening and I found excuses for months not to.  'I've got a sore throat, sir,' you know, 'I've got a heavy cold, sir,' and all this sort of thing.  Oh, I held on for God knows how long and finally I ran out of [excuses]. He said 'For God's sake go on and bid, you've got to do it at some stage', and I leapt forward, shut my eyes and bid for some damn stock and someone said, 'Sell you 10,000.'  And I was so relieved that I had actually managed to squeek out 'Bid', I hadn't a clue who had sold me the 10,000 shares.  My eyes were shut, I was sweaty and what have you and he turned round and said 'Well done', I said 'Didn't someone deal with me?' He said 'Yes, don't you know who it was?' I said: 'Haven't a clue'. 

BA: But you were able to get through that sort of apprehension after a while.

GL: Yes.  After a while.  Then it became natural and I suppose as a boss man then you were telling your boy, 'Go on get in and bid'. But it was... they would take the micky out of you - the crowd - but in a nice sort of way.  But it was a hurdle to cross; it wasn't a disaster but its something that always sticks in my mind.

BA: Did you ever have people, brokers for example, knowing that you were new trying to come up and either take advantage of you or ...?

GL: Yes.  You would get certainly a small percentage, a very small percentage. I think it goes on all round the world that sort of thing.  Here's the raw chap, we'll just take him to the cleaners.  Yes, I'm sure it happened to me at times - I can't think of specific instances but without any doubt.  As against which you would have your friendly chaps who would say 'What are you calling so and so' and you would make a price and they'd say, 'No I wouldn't make that, call them higher or call them lower.'  You know, very helpful a lot of them, very helpful. And I think if you played it down the line, 80, 90 per cent would help you as against the other way round. You'd always get your chap who could see a quick penny to be made for himself or what have you and he'd take advantage of it.  I suppose one learnt from it because then after a while you got to know them and so you pushed him to one side and you didn't trust him and he would not see the good bids, or the good offers.  

BA: Do you remember any particular personalities from this period or ...?

GL: Yes.  One in particular who was an extremely good dealer, who dealt for one of the broking houses that was involved with the mining houses.  I remember him going up to Tony Lewis in actual fact and saying, 'That's a nice tie you're wearing - where did you get it from?', and Tony just looked and said 'ICI made it'. He said 'I'll go and buy myself some ICI', which he did, then would walk round the corner and say, 'I'm bloody mad, what are you calling them now'and sell them at a loss.  And he in actual fact gave me an order. This is coming on to a slight technicality. He gave me I think my first big order in the mining market when he was acting for Saaiplaas which was a share there.  And he was a huge seller and he was selling them in 3 halfpenny rises.  In other words, if they were 9 shillings he would sell them at 9 shillings, then he'd say 'I want 9s. and a penny halfpenny', then he'd want 9s. and 3d. and so if he was a seller at 9 shillings, I would make 8s 10 1/2d 9s 1 1/2d. So if I sold at 9 1 1/2d. then I could take his stock at 9 shillings.  Which worked very well and we dealt at 9 shillings up to 10 shillings.  You know in 3 halfpenny rises. And then the share price stagnated or there was no interest and nothing happened and he came up to me one day and said, 'Lederman, what the hell are these bloody Saaiplaas?'  I said, 'Well they're 10 shillings, sir, 9 and 10 1/2, 10 and 1 1/2d' knowing he was a seller at 10 shillings.  He said, 'It's about time we got them moving isn't it?' I said, 'Well, I'd love that.'  He said, 'What are you calling them, 9 and 10 1/2, 10 and 1 1/2d?' I said, 'Yes'. He said,    'I'll buy 10,000.'  I said, 'You'll buy 10,000?' He said, 'Yes.' So he bought 10,000 at 10 1 1/2d. knowing he's a seller at 10 shillings.  So he said, 'What are you calling them now?' By which time I was totally and utterly confused. I said, 'Well 9 10 1/2d., 10 3d.' He said, 'I'll buy 10,000.'  He said, 'What are you calling them now?'  So I said, 'Well, 10 shillings to 10s. 4 1/2d.'  He said, 'Sell you 25,000.'  What he was trying to do and it worked because there was a lot of punting in the market at those times and the punters had obviously realised that the share had stagnated. He'd bought the stock for himself and was selling them for his real order, which was the shop, and once they went through the 10 shilling mark - and I could mark up in blue to 10s and 1 1/2d - then the punters think, 'Hello, they've broken out of the 10 shilling range, we'll have a go at those.'  And it absolutely worked and the shares moved up and here he was buying stock knowing he was a seller and I thought that was an absolutely lovely move, marvellous move.

BA: Was there a lot of that kind of strategy? Were people quite expert at that kind of thing?

GL: Well, I think you had your professionals in all markets.  Yes, I can't think of a clear cut instance, yes there were professionals but that was an outstanding strategy, as you say, in its way.

BA: Whereas where you say punters, were they the ones that simply looked for the movement of price? 

GL: Yes, to take their sixpence out of it or whatever it was.  Yes, it didn't matter if it was Free State, Saaiplaas, ICI or something else, they just wanted to punt and get the Christmas box, or what have you.  But this man was acting in the interests of his client. 

BA: Now at some point you were invited to become a partner of the firm, presumably?  

GL: Yes.

BA: Did this make any big difference to your style of work?  

GL: Well, it obviously increased one's stature.  I can't remember, as I say, the year, quite clearly, the firm...

BA: Roughly when, early '60s, late 1950s?

GL: I'm guessing, I would guess late 50s, but it is a guess, I'm sure I could look it up in those records there... by which time the firm was, as I said before, on an upward move without any doubt.  Again, I can't remember how many people we employed when I started - [a] very, very small number of people but I would imagine it must have doubled or trebled - and it was recognition in the Stock Exchange itself. Partner of a firm was a partner as against a boy or what have you. So, yes, it did help. Because then, I think, you were fully installed and unless you did some naughties or what have you this was going to be your Stock Exchange career and your career with that firm, and as I say unless disaster struck in any sort of way, which touch wood, they didn't.

BA: You were dealing with a bigger book?

GL: Yes, well, the progression was from the blue button to the dealer in that area - the same area where you had been a blue button - then with an expanding firm you had to find people to open new markets and I moved into the UK equity market, finished with the mining market, and opened one or two markets there.  It was in the days where the jobbing firms had price agreements. 

BA: Could explain that a little bit?

GL: Yes.  The jobbers decided that they would make a certain fixed price in a share.  It could have been a 3d. price, 6d. price, 9d. price, shilling price, but you couldn't make a closer price. And this was to save the profitability of it and I certainly remember I opened our bank market - and this brings in the social side as well.  One of my competitors was with Wedd Durlacher - chap by the name of Jack Hicks.  We played football together and he ran their bank pitch and we had a partners' meeting and it was agreed that we would not abide by price agreements.  The width of the price in old money was 1s 3d price in bank shares and I had to go round to the other jobbers, including my chum, and say, 'I'm sorry, we are not going to have any price agreements,'  and it didn't go down well.  And there was a huge price war in that the day we started, my friend's firm cut the price to a shilling, so we cut it to 9 pence, he cut it to 6 pence and in the end it came down to a threepenny price in the bank shares - and this was the Barclays Bank at 3, 4, 5 pounds making a threepenny price which quite clearly no-one could make a light out of, and this went on for a year or something. And actually my friend died - he had a heart attack, because I think the pressure was too much for him - and it became a delight to brokers because they had a very close price, they could deal, they could almost move the thing, but there was this fight going on between competitive jobbers, and eventually another firm dropped out and then the price gradually widened. But it was a very hard time.

BA: Where did the pressure come originally for this price agreement?

GL: From jobbers.  I think, as happens now, there were times when no money was being made and I think it was the big jobbing houses. We weren't involved in it.  We weren't consulted, we were too small a House at the time. And I think they decided that there was only one way to protect a certain amount of profitability.  If you make a 6 d. price in something, that's not to say that the broker couldn't deal inside but you just made your 6 d. price.  If he said, 'Well, I'm sorry I'm a dealer threepence inside that,' then the jobber could say something.  It was just the opening gambit of it.  And I think it did protect the system to an extent.

BA: Had there been price agreements previously, I mean did you ever get this in the gold market?

GL: No. Not in the mining market that was a total and utter free for all, absolute free for all. No it started basically in the equity market. I don't say they've got them nowadays but its almost automatic there's a tuppenny or threepenny price in Marks and Spencers or what have you.  Common sense says that you just don't make anything out of it [otherwise].

Tape 2, Side 1

BA: You said that you were expanding the business of the firm and you started to run a book in UK equities.  Was this a particularly difficult thing for you? Was it a completely different market and you had to learn different ways?

GL: Yes, totally different. A) it was the big change over from being dependent on somebody - you always had your boss there - to going to starting on your own where you were the boss man and you had a junior under you.  Secondly, you could get a feel to stocks and I, by this time, had got a range of the mining shares, and you knew if something would over react you could take action, if it moved up too fast or too quickly or too far, you would think, 'Hello, that's gone too fast.'  Here you had to find a... well, learn again.  And also the people were totally different, because brokers, by then had their experts, their expert dealer in a mining share, their expert dealer in the equity market. So I was going in to find a completely new crowd of people and having to find the feel of the shares and learn a little bit about the shares, not that we as a company worked on the basis of knowing too much about the company;  we were interested in what we thought the right price was and whether we could buy them at a price or sell them at a price.  So we didn't pay a lot of attention to it but had to know [in] broad terms.   And it was frightening, it was worrying, and it was good; but it was pressure,  and like a lot of things in life you could have your good spells when it was marvellous, of course, and you could have spells where everything just went wrong for a while and your timing might have been just wrong. And you were making a loss each day so you were embarassed, you know, when the profits came in and when the senior partner said, 'Well how did you go today?' and some chap said, 'Profits on so and so, profit', and you'd say 'Loss of so and so', and you felt you were letting the side down.  But everyone, I think, had that type of spell, and you did feel bloody awful.

BA: But did the other partners basically support you through this period? 

GL: Very much so, very much so.  You know one would say, 'Come and have a drink', or something, 'any way we can help?' And, as I say, I think it was patches one went through and you got very down, or I certainly got very down at times. No, I think if the partner thought you had gone off the rails and went out all night, drinking all night or womanizing all night, then some action would be taken, but if the chap knew you were trying your best and it was one of those spells then they would be supportive.  In fact, at times they said, 'Go on, clear off and have a holiday' - because mentally you were getting yourself in a state - 'Go on, go off have a break for a week or ten days, come back with a clearer mind.'  And these things change, suddenly you would just get an order and make a little bit of money again and then the ball started rolling.  I don't think you can go through a job like that in the Stock Exchange and expect to make money everyday.  Life's not like that and quite rightly so, really.  

BA: How did the other jobbing firms dealing in industrial equities react to Smiths starting to run a book?

GL: I don't think a lot of enthusiasm.  We were known as, I think, a first-rate house, very commercial house, and another competitor coming in then was going to take x amount of business away from them and probably trim the margins.  And I think that did happen in actual fact. And then you got down ultimately to two very big firms - Wedd Durlacher and Akroyd & Smithers - and then three others - Pinchin, Bisgood and ourselves - and I would think, going up to Big Bang, I think Smiths had become the biggest jobbers in the equity market at the time of Big Bang, but there was a long haul in between times and we were stretched for capital at times.  I think we were perhaps almost over expanding, because we moved into quite a number of markets and certainly then of course you had a boom and of course the price of shares got heavier.  So, when you once started Marks & Spencers were œ1, but by the time you finished, Marks & Spencers were œ2.50 or œ3, so you were financing more shares at heavier prices.

BA: Was there some point where you all took a decision to expand the firm's business?

GL: Well, as I say, I think it was always in the back of the partners' minds a) we had to get away from the reliance on South African mining shares because the political thing started at some stage; and the equity market was starting to move; and we were producing people inside the firm who were going to be quite capable of running their own books and you had to give and let them takeover; and yes the firm wanted to cover virtually all markets - all the equity markets then - perhaps apart from fixed interest or things like that. Yes, it was certainly conscious decisions and it was reviewed annually or bi-annually or what have you and then situations would crop up.  We took over one or two firms - smaller firms.

BA: Yes. Can you name them?

GL: Certainly Sambourne was one we took over.  It was smaller than us but good equity jobbers.  We took over... can't remember the name of the firm, Moy, a rubber firm, so we would sell plantation shares.  And then we had a move into the gilt market where we took over a tiny firm, R.H. Prance - not with terribly good results. There probably were one or two others which I can't think of at the moment.

BA: But were you again pursuing a merger policy similar to what Wedd Durlacher were doing?

GL: No, not directly I don't think.  I think if situations cropped up then we would look at them. Basically we'd grown from in-house, we liked to produce our own people, we had our own style of jobbing.  We found, when outside people came in, that the styles conflicted somehow or other.  It's not to say the chap wasn't a good jobber or what have you. It just wasn't our style. So if we could produce people from in-house we did.  And there seemed to be quite a lot of people around at that time, coming up through the ranks. 

BA: How did you manage these actual takeovers?  Did you simply expand the number of partners or did you mainly take on their staff or did you take on their books?

GL: Took on their books and possibly some of the partners and let some go, depending on age and perhaps ability.  I think there were a lot of things.  If we dealt in x markets and this house dealt in other markets, and again it came about through a friendship or something like that, here was the chance to expand the firm.

BA: What was happening to other jobbing firms at this time? Were many of them expanding, or were many of them simply disappearing?

GL: Mixture.  As you mentioned, I think Wedd Durlacher were expanding rapidly, and Akroyd & Smithers, the two successes.  Some I think were partnerships and perhaps the capital was getting restricted or the senior partner was thinking, 'I'm going to protect myself.'  And, as I say, it was an unprofitable business at times and if you were a small business you could either merge or disappear. I don't know what the numbers were but it came down dramatically during one of those slump periods when certain firms were taken over or gave up.

BA: Was the type of business changing? The size of bargains or was institutional business making a big difference?  

GL: Yes. I don't know what the stats are but the private clients holding has gone down over the years and the institutional side has gone up and this certainly became a factor and also, going towards the latter days you were getting firms having discretionary accounts with private clients.  In other words if they had 5,000 private clients and they decided they were going to buy ICI they had a discretion to buy those and the order would come to the jobber as a block order.  The jobber wouldn't know that that broker was dealing for 5,000 clients, all he knew was the broker wanted to buy half a million ICI or what have you, whereas a few years before then, it would have been a lot of brokers dealing 100 shares, 500 shares. Yes, it became a block trading system, very much so.

BA: Did this create problems for the jobbers in terms of the kind of capital they needed?
 
GL: Yes, yes, I think so, yes, capital and the risk of it. Take on an order in half a million xyz and if that stock was being recommended or something, in ten minutes there could be another order in for half a million and you were looking at a fairly dramatic loss very quickly. It became more compartmentalised (if there is such a word) and again I think you had your leading broking houses, starting research and analysts which was something that if it did happen - it was minute in my early days - and in actual fact you also had one or two of the jobbing houses trying that.  I think Wedd Durlacher and Akroyd & Smithers employed analysts themselves. We didn't.  Our attitude was that that was not our area at all.  We were there to make the prices and albeit if x is recommending a share then OK let him put his money down and we'll find the stock for him and try to get our turn out of it.

BA: Were you at Smiths basically using your own capital or were you relying on the banks?

GL: Relying on the banks, oh yes, very much so. Yes, I don't think you could have survived without borrowings from the banks. 

BA: Were the number of other jobbing firms competing directly with you contracting with the general shrinkage?

GL: Yes.  It's been in my career a shrinking thing.  I don't know the numbers.  I would think when I started there must have been 60, 70, 80 jobbers and you were down in broad terms, I think at the end it was down to 17 in number of which 50 % of those were small houses and then we were back down to the big five in the end.  And we in actual fact nearly merged with one of the five, with Bisgood Bishop.  Terms were agreed and then the Monopolies [and Mergers Commission] stepped in and said they were going to review it and by the time they'd agreed that it could go ahead, the world had changed and it didn't go ahead.  But as against which, I'm absolutely convinced in my own mind that even if you say the numbers were down to three, eliminate Bisgood if you want and one other, to my mind it was still highly competitive.

BA: This was one thing I wanted to ask you about, because an outsider would say well it does look as if there's a potential monopoly situation,  how does competition operate in this environment?  

GL: Well, I would put it down to: it was two or three heavy weights slugging it out as against ten or fifteen light weights or what have you. All I know is that I finished jobbing virtually when Big Bang finished and the competition was huge from the other jobbers and if an Akroyd and a Wedd were making prices in Marks & Spencers...on stores shares and I was, I knew I had to be on the ball because these were two big houses that would take my business away from me.  It was highly competitive.

BA: Did you feel with eventually only 17 firms that you each still had your distinctive character, that there was something distinctive about Smiths and the way Smiths did things?  Or were you more or less all tending to become very similar?

GL: No, I think there were different styles, different backgrounds to individuals.  I think - I'm not saying with sour grapes - Wedd and Akroyd built up their business mainly through gilt-edged markets.  I say mainly, a large percentage of it came from the gilt-edged market and therefore they could pump money back into the equity market.  We didn't make any money in the gilt market, the reverse we lost money.  I think there were different styles. I think Wedd were always recognised as the establishment firm as such, with Akroyd very close behind or even overtaking at one stage and we were still a pure market, pure jobbers if you want and that was our philosophy all the way through.  We wanted the brokers to come to us to know that the deal was clean that we didn't have any research or what have you. Whereas as I say, I think the others were building it to an extent. And Bisgood, I think, were less significant and Pinchin I think were a better firm, this is an individual view, on the bear tack and of course you had a bull market for a number of years so they weren't quite so effective towards the latter part of the time.  

BA: Can you say anything about the much smaller firms?

GL: Trying to think, certainly there was one - one of the equity firms, a fellow by the name of Jenkins, who had their niche in some of the smaller companies and they were very good, and I think they had connections with some of the holiday camp people etc, and the shares they dealt in, they were very good.  Who else was about?  Harold Rattle who I didn't know very much about.   And of course some of them were in the gilt market which wasn't my area at all.  Or fixed interest markets which I didn't know a great deal about.  

BA: Now you continued to run your equity book right through until Big Bang and you were steadily moving up in terms of seniority in the partnership, were you?

GL: Yes.

BA: How did that actually work? It was one person retiring so you would move up?

GL: To an extent, yes.  As I say the four originals when I started had obviously gone by then.  Then Tony Lewis took over as chairman, and there was Tony Lewis, my brother and myself and a chap by the name of David Heath who were the next four in line of seniority or ability, or what have you.  Then from there it evolved again. And that was, I found, the most exciting time because that's when, as far as the firm was concerned, it started to roll really forward.  A mixture of ability and connections as well, and trust.  

BA: And how would you go about making policy? You would have regular partners' meetings?

GL: Certainly not to start with.  I would say it was all very informal.  It was still very much a partnership and we were friends and I think policy came up if something cropped up, but we were so close socially as well that we knew everything that was going on at the time and if something major happened to happen well yes then we would sit in a room and discuss things, but now its board meetings and sit round a table and the meeting will start at 4.30 or what have you.  This was much more informal.  You could keep your eye on a hundred people for example, and know everyone and most of them were in the UK, whereas now they are splattered round the world and [you're] talking about 1,000, 1,200 people and obviously its got to be different. 

BA: Did you ever have to think consciously about things like recruitment, or did that seem to simply naturally to take its course?

GL: What I can remember, it basically took its course.  I can't recollect that we were ever that short of dealers basically. The back office I knew nothing about, but the dealing side seemed to work itself through.  As I say, basically we were slightly unhappy at taking other jobbers from other houses. Obviously if there was a merger of some sort you took them and people came through but to take individuals seemed to us not quite to work.  There were times when you might have been short of two or three people but you couldn't have it all ways because if you got it ideally then they would be over employed at some stage.  No, basically, I don't think there were problems like that.

BA: And at some point Smiths decided to incorporate.

GL: Yes.

BA: Now what were the reasons for that?

GL: This was broadly speaking if I remember rightly, quite truthfully, I think the elder partners wanted to get out and get a touch.  I think there were a variety of reasons given at the time, some of might have been tongue-in-cheek things.  I think. to be quite truthful, that was the main reason.

BA: Did it actually make any difference to the firm itself,
the way it was structured or...?

GL: I think it made a difference which didn't become apparent at the time in the attitude: because here was this friendly partnership and I think, certainly I thought, 'Well it will carry on, we won't be disturbed.' and then quite rightly it had to be disturbed.  You were now accountable to shareholders and not to yourself and your mate who lived round the corner and I think also it put bigger pressure on.  You were in the limelight all the time and you had to disclose your figures and you had to explain why they were good, why they were bad or what have you; whereas, as I say, as a partnership, if you had a bad time you could thump somebody on the nose and say, 'We'd better do something bloody well about this.'  But the chairman had to get up and explain to shareholders.  And it was a business that had its ups and downs, however good you were. If there was no business there was no profit.

BA: But you were still all, as individuals, going down to the floor of the house each day?

GL: Yes.

BA: And trading as jobbers.

GL: Yes, yes.

BA: Had the actual art of jobbing changed terribly much since you started as a dealer? The actual doing business face-to-face?

GL: No.  In broad terms, no.  As we said before the size of the business got bigger. I think, you can't teach somebody jobbing, I think it is a flair business.  You can be the greatest mathematician and that doesn't necessarily help you.  You can know everything you want to know about a company, it doesn't necessarily help you at all.  No, I think it is absolutely flair business and as I said before I think it works on being commercial, being, hopefully, trusted, and having some sort of personality that you were attracting your customers to you first primarily so that you saw the business and also that if you saw it from customer (a) who was one of the big fellows, customer (b) might be the one where you could unwind that business through.  No, I don't think it did change up to Big Bang.

BA: What about the Stock Exchange itself pre-Big Bang, say late '70s, early '80s?  Had that changed as an institution, since you had joined?  A lot of the practises and the habits changed and the customs, the way...?

GL: It became more serious without any doubt.  The frivolity went out of the place and it became a working place totally as such.  It must have changed in other ways, I can't really think of them.  Because it was getting to the stage I suppose where quite clearly it was going to open up globally as such.  But it sounds blase, I think one was still involved in one's own firm, or I was certainly in broad terms and wanted to steer to Big Bang to be a major power, and perhaps if Tony Lewis sees you he will be able to be more explicit than that.

BA: Did you feel any pressure on you as jobbers, for the system to change, for the abolition of single capacity?

GL: Yes, there was. There was big pressure on, well I mean there was a huge PR job done, I think.  And most people will say it was necessary to change because of the internationalisation of the place. I think it's right but I have certain doubts about it all, certain doubts, and I suspect a lot of the people working there now might have their doubts about it.  I think the biggest mistake was the change came so dramatically.  This was upturning an institution of two hundred years and saying within two minutes 'totally change' and I think had it been a more gradual approach then less damage would have been done than in the last three years has been done.  I'm absolutely convinced of that.  I don't think you can do that with anything in life, something that's worked 200 years and then turn round and say day one, 'We've turned that upside down now, you can start again,' there must be damage, has to be.  

BA: What would you say had been the main strengths of the jobbing system?

GL: The main strengths of the jobbing system?

BA: In what sense do you feel that jobbing provided a particular service in the Stock Exchange in the way stocks and shares were traded that perhaps is no longer there?

GL: I think what I would call a freedom of dealing.  In that there was a flexibility which I don't think exists now because you have a visual screen which says the price is such and such and prior to Big Bang you could make your price and if a broker said no, you could make your price and say they were 100 to 2 and if a broker said, 'I'm a seller at 104', you'd say, 'I'll buy those.'  And I don't think there's that flexibility around now and I think that the visual screen destroys a lot. To watch in the morning, sixteen or seventeen houses and you know that of the 16 or 17, 12 or 13 are waiting to see who'll put the first price in so they've got a guide, I think is wrong.  Because you went in there and made your price and your friendly broker would say, 'Your price is totally different to the one that Akroyd's making.' You'd say, 'I'm making it,' or you'd adjust it. But now you've got this thing set up on the screen and its lost its flexibility.

BA: Just concluding are there any particular personalities that you do remember now from the '60s or '70s in jobbing or the Stock Exchange, people who might have had an influence on you or seemed to have a big impact on their markets at the time?

GL: Well, quite clearly the two that had the biggest impact on me were the two I first worked with - Sidney Davis and Henry Marks. From rival firms, yes, there was one who I competed against in our bank market who worked for Wedd Durlacher - a chap by the name of Michael Bennett who I think was an extremely big thinker. I thought he was a pain in the neck at the time but he was a lovely man and a big thinker.  Again, it was this flexibility.  There were some big men in there, I'm sure there's some big men now, but there were people who did dominate markets and with the power of their personalities or what have you.  The man I didn't know terribly well - a man named David Blackwell - I think, dominated the oil market, for a while and certainly in the mining market this chap George Lazarus was a wonderful man.  You never quite knew what money they'd made because it was all very secret.  I competed against a very nice chap when I was running what we called our leader book, ICIs and the Courtaulds, and this chap of Wedd Durlacher - chap by the name of Colin Smith - he was not one of the establishment people, just a damn good jobber and he made it impossible for me to make money and he left, oh, several years ago and I was talking to one of Wedd's staff and he said, 'Well, you know he never made a light for us'. And I used to stand there and think 'How in God's name is is doing that business with so and so, he must be making a fortune.' He said: 'He never made a light for us.'  But of course you didn't know at the time.

BA: Were there any rogues on the Stock Exchange? I mean were there people known to have been sailing pretty close to the wind?  I mean we don't necessarily have to talk about the last few years but...

GL: Yes, there must have been, always were.  I honestly can't think of them off hand. Yes, I think they were sailing close... there was the good sporting type, there's the one that sailed close to the wind, there was the one that sailed over the wind.  Yes, there must have been villains, chaps that quietly disappeared.  If you disappeared then you had sometimes done something dishonest.  I mean you weren't allowed to deal in theory on a backwardation.  You know if the dealer's offered price was lower than the next jobbers bid price, in other words there was an instant turn to be made. I'm sure people did that but that was the Stock Exchange code and if you found that chap out then you put the bars up to him next time, you made your own decisions, but that was in-house villainy.  Yes, there were rogues.  But not all rogues were in the Stock Exchange.  The City gets tarnished I think at times by rogues who have dealt on the Stock Exchange, but they can be nothing to do with the Stock Exchange, but the City gets the blame for it.

BA: Well, finally, the last question. Did you ever consider leaving jobbing or were you quite satisfied with the career that that had given you?

GL: No, I don't think I ever seriously considered it and I never seriously considered leaving Smith.  It was, certainly from the '70s onwards when one was begining to get involved in the executive if you want [a word for] it, it was hard work but great fun and I have to say that one's made a reasonable living out of it. As I say: worked hard, played hard, no regrets at all, no regrets.

BA: Good. I think we stop there.

GL: Thank you.